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Mad Money

News/Business. (2013) New.

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01:00:00

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Us 6, Cramer 5, S&p 5, Jim 4, Valero 3, Citibank 3, Honeywell 2, Ameritrade 2, Jim Cramer 2, Johnson 2, America 2, Hess 2, China 2, Germany 2, Pharmas 1, Deckers 1, Mizzed 1, Lng 1, Middlebee 1, Anthony 1,
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  CNBC    Mad Money    News/Business.  (2013) New.  

    January 29, 2013
    6:00 - 7:00pm EST  

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time for the final trade. time to go around the horn. mike khouw? >> i'd buy put spreads in spy and i like chesapeake. >> tim seymour? >> i am buying this dip in jet blue and that latin merge demand. >> guy? >> psx, phillips 66, the gift that keeps on giving. i think it's still going. >> surely you can't be serious. >> i am serious, and please, don't call mill shie shirley. >> anthony? >> i like herbalife at these
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levels. >> beeks? >> no! >> i tell you, one of the strongest currencies out there is the euro right now. i still like it. above 135, especially fxe, your etf. >> thank you so much for watching. see you tomorrow, 9:00 a.m. "squawk on the street." back here again at 5:00 for more "fast money." don't go anywhere. "mad money" with jim cramer starts right now. launch. ""mad money"" starts right now. i'm jim cramer. welcome to my world. >> you need to get in the game. >> firms are going to go out of business, and he's nuts. they're nuts. they know nothing. >> i always like to say there's a bull market somewhere. >> "mad money," you can't afford to miss it. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends. i'm just trying to help you make a little money. my job isn't just to entertain but to teach you. call me at 1-800-743-cnbc.
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the dow jones average is just a stone's throw from 14,000. headed to its all time high that we reached five years ago. the index which rallied 72 po t points nasdaq 52.2% is in rare territory for certain. yet the chatter it remains skeptical. as i've said many a time, i'm never going to criticize the scep tisism i employ. it is a quality that has made me a ton of money versus the complacency which has been a continual loser. it allows you to leave the table after a big run are. i'm sure that there are plenty of index fund supporters who say
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come on and see, if you bought and held you would have done fine after all, but you could have made so much more money doing what you think is impossible. which is selling high, and buying low. getting out and getting back in. that is undeniable now. and if you manage to get out near the high of 14,000 and change or 12 or 11 thous of, and then you get back in near the bottom. you have made a fortune and more important you didn't lose one. congratulations. and then the logical question is this. should we ring the register this time around? is that the correct course given that it worked last time? well, you have come to the right place. let me give you some history before we get to the matter at
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hand. first this isn't the first time we have worked our way back to the crash of epic proportions. we fell to 2017 down to 1400 in october. that is right. another 50% rephrasement of the high. i was trading with karen and we went into all cash the friday before what became known as black monday. it was a brilliant call. i skated on it nfor years. but i couldn't resist. i fought it tooth and nail. hammer and ties. no level. we shouldn't have been to that level to begin with. i bought s&p puts as we neared the moment. i would tell anyone who would lis eten we were skating on thi
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ice. that was wrong. all i had going for me, was the fact that we faileded before. i didn't have a leg to stand on. it wasn't open-minded scepticism which is what i had thought. and it failed me. things changed after that. that is when the market began the long traverse to higher levels and with each milestone became a level of rejoicing. ♪ hallelujah that was admittedly exciting. i remember getting out my hat in 1999 and then the dow was hit by the nasdaq. up 2,000, 4,000. that ended terribly. >> the house of pain. sell sell sell. >> ever since the emlation of the dot comclops, a sure sign of
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someone who is about to wear a post-it. i know i don't intend to celebrate if you take out that 14,000 level. and not because i don't want to wear that on my forehead. we are in a different time than where we were then. we had a worried housing market and a fixed income market no one understood. and a robust market for all things technology. all things. you know what and those came crashing back to earth. and that produced notable eliminations like aig, citigroup which eliminated it's balance sheet and general motors and auto sales came crashing down.
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i would never have taken it out. and it is never too late to let honeywell back in. but here is what is really incredible about so many of the dow stocks right now versus where they were then. the last time we saw these levels we were riding high on the personal computer. the fablet and the smartphone have cut deeply into the businesses. at least in the case of intell and microsoft. they are and they have plenty of cash. hewlett-packard may not be as bad off as the decline would indicate. i don't know i like the stock but i think it is too low. since the 2007 top, the dow's added bank of america, cisco,
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chevron travelers and united health. none of these stocks can be considered expensive. bank of america, at least on a book value after the stock more than doubled last year. can i imagine if the stock added amazon, even as those earnings reported tonight were helped by larger than expected margins? there are no over priced but astounding performers in the average. but you want cheap? last time the dow visited these levels people were visiting the pharmaceutical companies as growth entities. from pfizer, j and j, merck.
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now they are getting back to where they were. so let's ponder these comparisons. now it should have $20 billion this year. j and j. merck which remember isn't back yet nearly to where it was. has $12 billion in cash flow i'm amazed at how cheap these drug stocks are on these cash multiples. consider that at&t the seller of the apple iphone is down 18 points. and verizon is barely up from that. despite in reverses from both companies. how about the stars since the 2007 peak? aren't they do for a fall since we were last at these heights home depot at gone from 41 to 67. in the interim, it has distanced
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itself and it is still inexpensive on earnings. it has come up to $204. but the company has almost doubled but they are forecasting $20 a share. doable number. the stock is not cheap. in the near term maybe, but in a 2015 basis, very in expensive. does disney belong up from 2034? the stock deserves this improvement. in fact, i can say there are plenty of stocks that don't be long as low as they are. alchoa, a fraction of its price tag. it has gone to positive $200 million.
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3m sit a muit is a much better now than back then. just now, just now it took out it's high. and how much more time does general electric have to spend at roughly half of where it was when it has embraced real profits in a real way. here is the bottom line. we aren't going celebrate the dow $14,000 level. but to presume the top is no more than what i thought in 1989. to think it is more expensive is fanciful. we were too high. i could argue that we don't belong here this time. maybe we will look back and find out that we were too low. cori in texas. >> jim, thank you for taking my call. and the time. >> the stock that i was calling you about was sony, sne, with
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the change going on, trying to sell the building in new york. and china potentially lifting the video game console ban, what do you think about that? >> you need product, and earnings momentum and they don't have it. i'm not a buyer of it i would be a seller. i feel the same way in the past. but learn from my mistakmistake. it may actually be time for optimism. "mad money" will be right back. >> coming up, how high? the market continues to hit new five year highs but the question remains will we get a pull back before soaring to knew all time highs. tonight cramer takes on the technicals when he goes off the charts. don't miss a second of "mad money."
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follow on twitter. have a question, tweet cramer. send jim and e-mail. or give us a call. at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. >> tomorrow see the live reveal, research emotion unveils the new blackber i 10. will it put the company on the come back trail? squawk on the stre streehe stren cnbc. to sport sedan... best ♪ ...people noticed. ♪ the all-new cadillac ats -- 2013 north american car of the year. ♪
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easier than actually going to the bank. mobile check deposit. easier banking. standard at citibank. this latest bull run has been spectacular, but how long can the market keep it up? isn't it a sucker's game to believe that the rally can continue can run it into a brick wall and crush your portfolio? maybe the rally has real staying power. when you look back at the history of the market, you can see that we may have only started a long march higher. i wanted to entertain on tonight's off the charts with the help of scott redler who is
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the team officer at t3 trading as well as my colleague at the street.com who has gotten this chart right so far. he points out that the market is not particularly kind to you right? you can see that right back to 2000 is trading side ways. it is looking that we may be able to break out of the range here. back on february 14th of 2012, revler told us that he could see it going to 1700 by 2015. since then, it has rallied to nearly 1508. we could see that target sooner than he predicted. but to understand his long-term optimism, we need to take a step
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back. for anyone who has been trading during the last dozen or sko years, it has been one crisis after another. the housing bust, apocalypse, so check this out, look at this. this is a chart of the s&p 500 from 1976 through 2000, look at how the market roared in the 80s. and then it surged in the '90s. in the '90s it surged 360%. we had two straight decades where stocks were fabulous investme investments. now he is not saying we are going to repeat those moves.
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it is not unprecedented for the averages to have massive multi year rallies. look at the chart from 1996 to where we are now. rather than going up endlessly, the s&p 500 became a roller coaster. in march of 2000, to march of 2009 we are only 50 points away from the levels of where the s and p peaked in 2000 and again in 2007. peak and peak and almost there. some peak think this means you got to get cautious, right? remember i talked to you about that at the top of the show. he believes we could be ready to
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break free from that pattern. he believes he could break out above this and make beautiful long-term highs. the reason? take a began dgander at the chag back to this past may. he thinks this is gorgeous. a gorgeous picture. one with a down right perfect bullish set up to start the year. remember the low was higher than the november one. so those are, we love that. that is perfect action. very, bullish time for charters because it indicates a powerful trend. kurtsy of the last minute fiscal cliff work around. and then it rallied higher giving our january these numbers we talked about. it broke out at 1474 and now we
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are above the key level of 1500 which means from his perspective there is little resistance level standing in the way of this rally. we are overbought but on the other hand it is possible to stay over bought for long periods of time without having a nasty pullback. especially when it is above the averages like it is now. another big positive for chart watchers. if the s&p pulls back. he would get more cautious. let's put it together going all the way back to 1970. when i had huge amount of hair. we have a monster rally in the 80s and 90s. monster in the last decade in the period of the known and who r
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horrid consolidation. this double top formation has controlled the s&p for years. based on the action he has seen, he thinks the index could break out from this range to new highs. the first time the s&p hit the 1540 or 1565 level in the past he thinks we might see some resistance. as soon as we get a cross above this double top which he is confident, then the next stop will be 1700 and perhaps beyond. 12.7% increase from where we are right now. it could get to 1700, but he thinks we are going to get there faster. here is the bottom line. you know i like this one. his chart gives us a technical reason to believe this move is far from over.
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from a guy who has called it right. we have to take it seriously. nicholas in florida. >> hey jim, how are you doing? >> i'm a little shy of voice but i'm hustling like everyone else what's up? >> i'm calling about blooming brands. i wanteded to get your opinion on it. >> it is new. it is doing pretty well. i have to compare it. i had a piece this morning about ruby tuesday. i would have compare it about companies of similar size. i have been anxious to do that. let me come back particularly because we have a lit of compone components that are playing havoc with the restaurant chains. but it could be the tip of iceberg.
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my take? it has been right so far. maybe he is onto something. after the break i will try to make you some more money >> coming up, tupperwar are e, should you seal up shares of this or could it be getting stale. don't miss cramer's exclusive with it's ceo. if you're taking pills for type 2 diabetes and you're still not getting the control you want call now or visit controlispossible.com. you have a chance to help control your blood sugar
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urks lately t been a lot of fuss over direct sales company they use regular people to sell their products. last week we had the issue over herbal life a claim which the company denies. and thursday an outfit was shut
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down called fortune high-tech. not all direct sellers are scams like this firm the fdc shut down. like herbal life. some are totally legitamite. best of greed compabreed compan tupp tupperware. even the queen of england land gets her breakfast cereals out of them. it is a huge hit in the development world as it gets 59% of its sales from emerging markets. this morning it reported a solid quarter a two cent beat on competitors that are up. and not only did the company
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give upside guidance. the company gave you a 72% dividend boost giving you a yield at these levels the stock shot up to a new high. let the stock is up 207% at slightly less than $20 giving you a big return. let's check in with the chairman and ceo of the company to get a sense of what is happening in the world of direct selling. welcome back to "mad money." guttentach. i'm here in frankfort. >> you did it again.
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what gives you the level of confidence to increase your dividend by an unbelievable amount? the largest i've seen? >> a couple of things. we really have confidence in a going forward approach. you know it is interesting that i'm in germany. people asked me what keeps you up at night and it was germany. it was 60% of our profits. now, we have multiple engines of growth and we are very much an and business. it is established markets like germany where we were up strongly this last year and very strong profits as well and we are emerging markets. second thing, we really look at our business and we look at the runway that we've got ahead and we say we are a cash generating machine.
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we have enough cash to grow the business and we decided you know what? we can handle this kind of leverage. we did a return 1.75 and we said let's return this to the shareholders. we don't have an interest in acquisitions. that means we are going to return some in the form of continued share repurchase. a lot this year. but we raised this dividend. it is a combination of these things. >> let's talk about that buyback. you could say you are buying 50% of your company in from the open market. i look at the numbers for this year. and what we are going to be buying it is 10% of the stock of the company. jim, a lot of people have asked us, why did you do it this way? i'll tell you, our partners are our shareholders and we went out
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to our 25 largest shareholders and some of them want it in dividends, they are looking for this high yield and others wanted it in share repurchase. and both look good for us. it is a signal that we wouldn't have down this unless we felt that we had confident growth. and i have to add, jim, we still have four or five markets that aren't doing what we want them to do. >> the other thing that you have done, rick, because you know that there has been a back and forth on our own network. karl, you have never retreated from distinguishing your company from these others including an excellent white paper where you say that her balanbal life is a
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network marketing company. you along with others are a direct seller. why are you distancing yourself from some of the other companies that claim to be in your industry? >> i'm not going to take issue with multi level marketers but they are chalk and cheese from traditional sellers. what you had from prior to 1950, avon, fuller brush. even tupperware people went out and sold to a retail customer. you had these network marketing companies that recruited people not so much to sell, but to consume their products and you saw it in cot msmetics and a lof them came and went because their
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episodic kind of businesses. they are wholesale buying clubs and based on sign up to save money and consume the product. we are based on we recruit our people, we finance them with their kit, we train them free and we teach them to go to a retail customer. who is the customer? over 90% of our sales are to a retail customer. only 10% to the sales force and they buy that because we have new products every year. the bulk of their products are consumption by their network. so they are chalk and cheese. >> how do you know that yours is 90%. if you have 3,000 store fronts in china. how can you monster thitor that.
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you wouldn't believe the level of detail we have. every monday morning we have a stand up meeting. i don't care if it is christmas day because the world isn't christian. it is one hour. we have a report of what happened the previous week. what the sales were and people that went to the party. we manage our bigs down to the detail of it. so it is not if maybe might. we know for sure. >> rick, i notice, and i follow your products, new chopper and new dish that i like. you can buy these things online and go to the website, it is not like i have to go to someone and then become a seller myself in order to get the product. no, but what happens is, most people don't understand our product unless they come to a demonstration. and so what will happen is, less than 3% of our sales are sales online. but when somebody comes to a
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presentation they see this is this new chopper that sells for $70 in the us and $50 euro here, they come to a party and they don't focus on what it does. they focus on what it makes. and i'll tell you, the younger women we are recruiting today. she says show me how to save time. we have a whole line of products that are time safv safers for yr women. >> thank you for coming on. great quarter sir, good to see you.
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it is time, it is time for the lightening round. and then the round is over. are you ready skee daddy, it is time for the lightening round. we'll start with eddy in new jersey. >> how are you? >> i hear you are not so good
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tonight. i'll do it, i'll finish it i'm a trooper. >> two weeks ago you had the ceo on from chineer and i got interested in the stock. i'm confused because there are two listed. >> the lng is the one he said it has a clear flight path. that said, it has quite a run. cool it a little and then do some buying. ryan in virginia, ryan? >> just wanted to give you a united states navy booyah. >> a thank you for serving booyah appreciate it. >> drug company, it is an orphan drug company. i think it is good, but understand it is speculative. >> let's go to mark in new mexico. >> looking at alan. >> i like that.
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buy buy buy. it is a good refiner. and that, is the conclusion of the lightening round. >> the lightening round is sponsored by td ameritrade. [ cows moo ] [ sizzling ] more rain... [ thunder rumbles ] ♪ [ male announcer ] when the world moves... futures move first. learn futures from experienced pros with dedicated chats and daily live webinars. and trade with papermoney to test-drive the market. ♪ all on thinkorswim. from td ameritrade. living with moderate to severe rheumatoid arthritis
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♪ >> don't just stand there, do something. that has been one of the major themes we think will play out in 2013. companies taking forceful action to unlock value. already we have are had our first success with the potential break up of hess one i've told you could happen. this oil and gas company which is now the subject of a proxy fight has vaulted ten points on the news. and i think the stock could go higher if the company gets sold. remember, hess has some of the best oil that is out there. i think it deserves to trade back at the helpful that stood two years ago up 18 points from where it stood now.
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so, i believe it is worth going overall the other don't just stand there, do something ideas that i had there on the show. first, the most recent is aliant systems. the niche includes precision weapons systems but it is known as a bullet maker. it would be the envy of any defense contract maker that would be hurt by the budget cuts. the news here. last night ollen a chemical company reported a descent quarter. the winchester ammunition division said sales were strong. ammo sales spiked saturday before the election and have
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continued strong. next we recommend that the house divided between food service equipment and cranes cannot stand. to me, the reaction to the streets to caterpillar's earnings and the sharply better than expected earnings with equipment used for construction tells me that is indeed worth the price of the equipment. suggests to me that the industry has too much value in it to not be unlocked by a motivated suitor. let's not forget the run by kitchen equipment maker, middlebee when they purchased the viking range system. the company could afford to take a run at the entire $2.3 billion
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system or seek to purchase the business. which for a while the remaining business. what do you say about a company that mizzed it's projections so far and created a product that might have a 40% failure rate. for most companies, i would say it would be on the 52 week low list. but not if it is johnson and johnson. the reason are, people continue to speculate that j and j will join the ranks of the older high flying farm pharmas. the company made it clear that it is going to start pruning divisions that aren't in the first or second spots. remember, new ceo has come in and he doesn't have to worry about the legacy of his much
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revered strangely predecessor william welden. a bit of a disappointment. but i think it is time to recognize that on earnings alone. stocks could be higher. this organic food company has organic growth. it is the one stop solution for the slowing growing package food companies whole foods. i think ceo has done a remarkable job buying up brands and blowing them out. he has created a $2.5 billion shareholder value. he owns 15% of the company. but karl might be more of a what have you done for me lately kind of a guy. i don't know how patient he
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might be. it has fallen from 73 to 55. if i was running campbell soup, a company known as a salty soup concern i would purchase hain and turn the whole company over to simon to run the darn thing. next up, the decker story. this one has gotten murkier. this one is said to be in talks to buy billabong also uggs the flagship brand seems played out. and so was timberland. i do not expect a good quarter from decker. but that is what happens. so, after listening to the dupont and honeywell calls. and hearing how well they are doing. i still can't believe there
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isn't a bidding war. taking into account the stock price. with the turning in europe perhaps at hand. maybe it won't matter. what else? that rush out of bond, remember they took in $400 billion into stock funds and attracted $14 billion in 2014. may allowed 2013's division dst, did hit it's 52 week high today. there are so many cats and dogs under the roof of this company when they could unlock so much value after breaking it up. i had thought that fortune brands would be a natural candidate for a merger. solidifying it's dominance in the housing come back. but like so many others, fortune
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brands hasn't needed much help from the deal breakers. finally, there is a real controversial one. bed, bath and beyond. a retailer reported in the times since i suggested that management was tired. constantly saying that amazon is going to crush the company. what can i say? i'm sure there will be another roupd. people think it is a border's or circuit city twin. meanwhile the shares are coming down and bed bath is cheap and too cheap for management to ignore. i think you would get a nice pop if they decide to take themselves private. bottom line, hess maybe it is time to take matters into their own hands and join into the
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parade. hain, deckers, dsd, fortune brands and bed, bath and bebeyond. don't just stand there, do something. "mad money" is back after the break. keep up with cramer all day long. follow on twitter.
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it's happening the revolution in oil and gas is happening. you just need to know where to
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look for it. today we saw it in valero. which reported phenomenal earnings this morning thanks to the great boom in us oil and gas drill. the best 4th quarter since 2005 flt when cars were g s gus elli said quote we released all imported light crude oils since we expect u.s. and canadian crude oils to be available we are increasing these cost advantage crudes throughout our remaining system. end quote. in other words, because of the shale and so many other terrific prospects. including countries that we regard as our friends, this
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trend is going to get stronger. prices at the american pump reflect the higher cost of the crude. the difference is monumental and could cause valero to go higher. it is the most aggressive company yet. only frontier remains at a higher value. they told a great story. the despairity between cheap domestic oil and crude is one of the reasons that i told you that hess is in excess is what it is selling for. the other day hess committed to getting out of the refinery which is dedicated to getting
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the crude at it's memphis and gulf coast refineries. the lack of pipe prohibits hess from getting the crude that valero has. it is proposing its own slatables. some republicspected oil people. wow, there are two important take aways here. the company is still well behind recognizing our domestic oil. the second is if we had an en y energy policy in washington and our battle for natural gas into it's thinking. we could smash opec and become the cheapest place on earth and put millions of people to work including in a more secure
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environment. we are barely scratching the surface of natural gas use. there isn't enough natural gas to sell cars in this country. what a sad set of circumstances. stick with cramer.
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